Why Boston Scientific Corporation, Regeneron Pharmaceuticals, Inc., and Vertex Pharmaceuticals Incorporated Are Today’s 3 Worst Stocks

Two biotechs, one medical device company finish as the worst performers in the stock market today

Jun 17, 2014 at 7:57PM

The worst performers in the stock market on any given day usually exhibit some degree of diversity, if nothing else. One stock will hail from the tech sector, another laggard will represent the energy area, and so on. Alas, no such diversity was present on Tuesday: Boston Scientific Corporation (NYSE:BSX), Regeneron Pharmaceuticals, (NASDAQ:REGN), and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), today's three worst stocks, all come from the health-care sector. Fighting off this sector-specific sickness, the S&P 500 Index (SNPINDEX:^GSPC) was able to tack on four points, or 0.2%, to end at 1,941.

Shares of the medical device company Boston Scientific shed 2.5% on Tuesday after identifying two possible uses for its cash on hand. It plans on either returning cash to shareholders through share buybacks, or using its dough for mergers and acquisitions. I'm not sure why this came as such a shock to investors, because both strategies are legitimate and frequently employed by corporate America. On top of that, Boston Scientific held less than $200 million in hard cash on hand at the end of last quarter, making it tough for the $16 billion company to move the needle with its cash alone.

Elsewhere in health care, biotech Regeneron Pharmaceuticals lost 1.9% in trading today. Biotech was the worst-performing industry within the health-care sector on Tuesday, and Regeneron shareholders were victims of that trend. Much of the company's potential hinges on the continued success of Eylea, an injection that treats age-related macular degeneration. The blockbuster success of the drug has helped to catapult Regeneron sales from $445 million a year in 2011 to $2.1 billion last year.


Cystic fibrosis treatment kalydeco has been a big winner for Vertex. Source: Vertex Pharmaceuticals

Lastly, shares of Vertex Pharmaceuticals stumbled 1.8% today. The stock is continuing a troublesome trend: it finished as the S&P 500's worst performer yesterday after a Wall Street analyst essentially nixed the possibility that phase III trials for new cystic fibrosis treatments would turn out well. Investors are inclined to believe the Bernstein analyst, who just returned from a cystic fibrosis conference in Sweden, where he spoke to pessimistic scientists. Invoke pessimistic foreign scientists at an obscure conference and investors will give you a podium -- especially in the health-care sector.

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John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

 The Motley Fool recommends Vertex Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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